Health care, the economic downturn and contemplative materialism
2009 September
Long before Barack Obama was on the public radar presidentially, a comrade was talking to some Amerikan intellectuals to get a sense of the party-building situation in the United $tates and the strength of the Democratic Party, which Amerikan intellectuals historically had difficulty separating from in practice. These people already thought in terms of nations, so without much pushing and not talking about "Maoism" or "communism" they acknowledged that the United $tates or at least the white nation including its workers was some kind of parasite. There are potentially thousands of Amerikan intellectuals who can understand what MIWS says about international exploitation, not just the absence of a First World proletariat (which "post-Marxist" pro-capitalists could agree on). (Then again, there are anti-communists who recognize implicitly that the United $tates exploits other countries, but articulate and pursue the "strategic" interests of the United $tates regarding oil and other resources.) The challenge usually lies in connecting a vague idea about parasitism to strategy and activism specific to a correct view of the First World, and commitment to further study. The stumbling block years ago, though, was health care, an issue that brought on a suspension of logic. (Homelessness and unemployment existing in the United $tates didn't elicit a similar response.) It was understood that Amerikans in general were parasites, but it was claimed that someone had a financially burdensome condition, and how could the comrade be so cold-hearted as to seemingly marginalize their struggle? The comrade's response at the time was to say that the resources used in treatment would still be stolen from the Third World, but the comrade was treated as a bourgeois incapable of empathy, as if random Amerikan individuals with a chance of being afflicted with a chronic or traumatic condition were to be regarded as the salt of the earth. What a joke: Amerikan intellectuals, jockeying for CIA/State Department careers, fantasizing about being the downtrodden oppressed by a bourgeois elite in an intellectual discussion. Even among those supposedly in agreement with MIWS on the labor aristocracy and the general stupidity of Amerikans given the education and information to which they have access, you have crypto-Liberals accusing Maoists of "elitism," and making fallacious arguments, when the crypto-Liberals don't understand something or perceive something as not understandable by middle-class Amerikans. It leads to contemplative materialism.
Such discussions having been had, one starts to realize that the vanguard arises without hand-holding in the First World and that this is even more true in recent years. However, the health care discussion going on in the United $tates since John F. Kennedy illustrates contemplative materialism and philosophy occupying the place of scientific materialist advance. Health care is the perfect weapon for imperialism to use against the oppressed, because it distracts from international exploitation while offering the middle class something and vaguely or explicitly representing Amerikans as economically oppressed. The U.$. middle class does not salivate as much about decreasing incarceration and actually wants to have incarceration, an unproductive activity supported with super-profit, while having health care; prison budget cuts are being made independently of the health care issue as a result of the economic struggle of the Third World. On the Third World side, intellectuals and leaders in the Third World can see more or less clearly, in terms of either exploitation or "inequality," that there is something wrong about the idea of quadrupling living standards in the United $tates while living standards elsewhere stay the same or decrease, less so with "universal health care," because it is not as obvious how health care for First Worlders is connected to existing parasitism and in fact expanding parasitism. Unfortunately, comparisons with Cuba's health care system are a source of confusion. The discussion of why a "wealthy/prosperous" country should not have health care that even Cuba has implies that there is no relationship between First World universal health care and global inequality. Missing from the discussion are the actual dynamics of how a rich imperialist country attains universal health care while remaining a rich imperialist country.
This writer sees something wrong about people's having to pay as individuals for expensive illnesses that could have afflicted anyone or those with genetic predispositions, and about some social groups' not receiving preventive care and chronic care other social groups receive. But, with more than 300 million people there are a million things that could be wrong in a capitalist country, whether it has a revolutionary vehicle or not. An individual might struggle. But, where is the struggle going? The practice of scrutinizing society and critiquing it according to ethical principles without making advances in understanding the social practice underlying change is a fusion of contemplative materialism and idealism that Karl Marx and Friedrich Engels criticized repeatedly. There are people who excel at discoursing on the injustice of every little thing and alleged subtle oppression or suffering of whole populations including First World populations -- a practice that purports to be more refined and radical, yet is confusing and often trivializing -- but their intellectual and political approach is contemplative-materialist, idealist, and often mechanical-materialist. Mechanical materialism may take the form of thinking racism will go on forever without the imposition of externalities. (There is not much change going on inside the United $tates without impetus from the Third World, but the United $tates is part of a larger social formation within which there is racism that will be brought to an end by the proletariat, concentrated in the Third World. Most discussion in the First World of injustice ignores the Third World as a positive factor of change.) A notion of change as being brought about by charismatic individuals without social forces involves a kind of externality, and contemplative materialism.
Barack Obama knew full F-ing well that universal health care could not be attained without stoking reaction against migrants, and that's not to mention any wicked and criminal calculations he made regarding health care in connection to Afghanistan, Iran, and Pakistan. Obama's line is "fuck the people, what about my career?," in addition to "don't blame me, I'm Black with my hands tied." Of course, there are structural causes of war and different reasons of various exploiters, Obama's role among these being to the perfume the United $tates with his cultivated image as an innocent, if not naive, pioneer and idealistic underdog. Catholicism props up contemplative materialism and philosophy in general, though, and is suspect in the health care discussion among intellectuals -- an issue that has nothing to do with Obama's or the Kennedys' religion. (Although, Catholic Church supports health care for undocumented migrants and is to the left of Obama in a certain, social-democratic sense. On the other hand, the whole debate ignores wealth transfers to the United $tates.) The combination of contemplative materialism and philosophy is good for the Democratic Party, which can claim to be addressing an injustice, only encumbered by Republicans. People may not be sure what do about various injustices identified, but they hear the Democratic Party talking about them. With the two-party system and the existence of an opposing party on which failure may be blamed, there is potentially endless support for the Democratic Party. It is not sufficient to talk about a new group oppression or another instance of group oppression. There has to be a vehicle or dynamic for ending it, or the default will be to work through the Democratic Party. Sometimes, a vehicle is specified, but its role in the last analysis is limited to voting for or pressuring a Democrat as a constituency.
Health care for the majority of the world's people will be better in a socialist society than in a capitalist society, but the real obstacle to universal health care in the United $tates is the righteous struggle of the Third World against U.$. exploitation. One might fantasize that the United $tates would import more Third World doctors, but what is actually going on is that the health care industry and health care employment of U.$. citizens is already growing. Health care belongs to the unproductive sector. Coinciding with this, the U.$. population is aging. The lowest-paid health care workers must still be paid at least the minimum wage, and they are often paid more. In contrast, the income of Cuban health workers is less. That is the first clue that there is something wrong with ignoring international exploitation. Then, even if the cost of universal health care is paid out of the profits of insurance companies and some medical companies, U.$. finance capital's willingness to support universal health care depends on how much resistance the Third World is exerting on the total amount of profit; can universal health care be afforded. Where so-called universal health care offers corporatism to finance capital as a net economic benefit, the Third World would suffer the brunt of the consequences, with corresponding resistance.
The way health care and the current economic downturn have been separated by Democrats particularly, other than to say that Amerikans need health care because of the economic downturn, involves contemplative materialism and idealism. So does the issue of the economic downturn itself.
How to conceptualize the dollar bubble in the context of unequal exchange
Readers will notice that MIWS does not do journalism generally and does not like futurology. The problem with most discussion of the "economic crisis" and "bubbles," though, is that it ignores unequal exchange, the predominant form of imperialist parasitism. Instead of saying, "MIWS, you are academic," or thinking, "I didn't learn about that in my econ course/Marx reading group," one should look into this. If pseudo-Marxists think unequal exchange is academic, they are free to stop bashing China for alleged protectionism while serving up their own protectionism on behalf of the labor aristocracy.
Though not as prominent as the "housing bubble," the "credit bubble," and still the "dot-com/information technology bubble," lately there has been more discussion of the U.$. dollar bubble in the English-speaking corporate media. Among those catering to people with commercial interests needing accurate information, the attitude toward the dollar bubble has been more realistic than among those unwilling to upset "confidence" or raise uncomfortable questions about the United $tates' trade deficit and the basis of Amerikan consumption. Regardless, there are two hypotheses that this writer would scrutinize.
1) One is that the living standard situation of Amerikans is basically secure, and that the abandonment of the dollar as the main reserve currency and trade settlement currency of the world would not precipitate or open up the possibility of further changes perhaps affecting the terms of trade.
2) Another is that the Third World cannot decrease use of the dollar as a reserve currency too much because it depends too much on the United $tates' purchasing its goods and having credit. There is the parallel idea that it is difficult for the Third World to extricate itself from the dollar as a settlement currency. Different economic factors, and political and military factors, behind the abandonment of the dollar may be ignored.
The prospect of a currency's permanently losing its status as the dominant world reserve currency and settlement currency in the midst of price distortions as exist today, and ten-plus-times wage differences between the issuing country and holding countries, is unprecedented. Third World elites have taken interest in the exportation of their countries' resources in effect in return for fiat money, but there is also price distortion hiding the labor done to produce exports and imports (the double factorial terms of trade).
People in the United $tates are apt to think about the terms of trade as something worsening the trade deficit (e.g., if the price of the same imports from China increases relative to the price of U.$. exports). As with the trade deficit, terms of trade for Amerikans are typically devoid of labor considerations. Those concerned about the trade deficit complain of alleged Chinese mercantilism. Those saying to not be overly concerned bemoan the mercantilism of politicians stoking fear about the trade deficit. Because of concern (involving demand elasticity and inelasticity) about the trade deficit, and chauvism regarding "made in China" products (sometimes described as "overpriced crap"), Amerikans alternately appear to support and oppose supposedly high Chinese export prices. The real problem is that Amerikans are stealing Chinese labor. There is a fetish of the dollar in the Third World and so Third World "mercantilism" seems plausible, but the general situation where the Third World exports embodied labor and imports less labor than it could, were it not for high First World export prices and other hampering factors, hurts the Third World, not the First World, despite outcries against "currency manipulation" etc. Terms of trade discussions that ignore labor (on one end or both ends of trade) contribute to ignorance of exploitation occurring when goods are bought and sold at relative prices that do not match their labor-value content.
Money is not irrelevant. If China were to loan money internally instead of loaning to the United $tates as some have proposed, the wage level in China might increase, and the prices of Chinese exports might increase, the price of Chinese labor internationally. Yet, the number of people who would point that out besides MIWS is minuscule. Prices and currency -- these things are important, but they are not understood properly and in perspective.
In the English language, there has been some discussion of currency and purchasing power, and discussion of reserve currencies and settlement currencies has appeared in the corporate media, mostly without using the word "bubble." (And if a bubble is implicit, it is not seen to have burst or deflated near or before the beginning of the financial crisis.) This writer is not sure everyone in the proletarian camp understands how currency issues intersect and do not intersect with unequal exchange such as what has been emphasized here at MIWS. At a high level of abstraction, there is the exchange of things between countries. So, for example, repatriated profit from foreign investment is at least partly used to pay for some imports and should not be double-counted after net transfer of product has already been measured. Various kinds of transfers may add up to the result of unequal exchange, defined very broadly, between two countries. Arghiri Emmanuel very specifically highlighted a type of unequal exchange involving wages as an independent variable. MIWS has discussed unequal exchange more broadly, while, however, distinguishing unequal exchange from investment profit repatriation. Unequal exchange here should be distinguished from transfers related to currency exchange, too. The idea that a Third World country can purchase fewer baskets of goods with the money it receives for exports because of purchasing power parity is ultimately tangential to the issue of the undervaluation of those exports in terms of labor value and encompasses neither the totality of unequal exchange nor other kinds of unequal exchange.
Regarding dollar holdings, as much as the Third World does not spend its income on imports and domestic investment, the Third World's dollar holdings "should" be perhaps ten times larger. This writer does not know what would really happen if there were not unequal exchange, but that is a way of saying that unequal exchange is far worse as a labor drain than dollar holdings. Even if China's dollar holdings just disappeared, the potential loss would be less than China's annual loss due to unequal exchange. When China does spend dollars on U.$. goods, as with the expenditure of money in general, the money continues its journey in the process of unequal exchange, in which First World goods are sold at above their labor value and Third World goods are sold at below their labor value.
This writer does not consider it contemplative-materialist if people focus on the dollar bubble after having admitted that unequal exchange benefiting the United $tates is in the trillions as was done in the book Imperialism and Its Class Structure in 1997.(1) The decline of the dollar as a reserve currency could be seen as the onset of further changes, not limited to things commonly discussed in the English language. The problem lies in that most of those talking about this or that bubble or "overproduction" have not made any calculation of unequal exchange. Many understand unequal exchange conceptually, but do not calculate it. As a result, the importance of a given bubble is inflated relative to other things or seen in isolation; at the same time, the class struggle that actually exists and the exploitation on which it is based go unrecognized. Pages upon pages have been written about crises, bubbles and "overproduction" without mentioning any kind of international transfer, including transfers from Third World workers to the First World unproductive sector.
There are more and less obvious sources of surplus value connected to being the issuer of a reserve currency. Besides these, there are other sources of surplus value. It has been pointed out that dollar holdings of non-U.$. countries, in various ways, have financed the Afghanistan and Iraq wars. With credit, for example, it does not have to appear to Amerikans that the cost of war is coming out of income they already had, and thus dollar holdings by other countries are useful for war. Nonetheless, there are multiple sources of surplus value that can support war and consumption.
Without more theory and analysis, it is not easy to say what effect the decline of the dollar as a reserve currency and as a trade currency will have on the international exchange of commodities and their prices, though economists neglecting unequal exchange altogether will be headed in the wrong direction. It is a fact that the relationship between unequal exchange discussed by Arghiri Emmanuel and international currency has not been discussed comprehensively. Whether gradual or sudden, though, and with or without retaining the dollar as one reserve currency, the end of dollar supremacy might take one chunk out of parasitism. Income redistribution with "shovel-ready" projects does not provide a new source of surplus value. The decline of the dollar may take some of the steam out of militarism. Or militarism may be undertaken to compensate for the loss of hundreds of billions of dollar in annual transfers.
The abrupt removal of any single major source of surplus value could be cataclysmic for the United $tates, but one needs to look at the actual dynamics of a situation. Despite dollar depreciation, the prices of U.$. exports may remain high in an unequal-exchange sense, and the total amount of super-profit may increase with increased exports. Alternatively, the United $tates may have difficulty importing. One would need to know what is going on at the margin, including where imports are concerned. The point here is to not make too many assumptions or ceteris paribus arguments, or rely on media suggestions. At the time of this writing, Republicans are accusing Obama of wanting to print money to pay for health care "reform." There is truth to that, and it is revealing how some aspects of the truth have to come out in a country like the United $tates, but right now many, including scare-mongering racists spreading fear of a Third World revolt, are talking about the status of the dollar for political reasons without doing anything yet other than scaring up the price of non-dollar assets and commodities somewhat. One should not put too much stock in what various exploiters say from day to day. The labor aristocracy benefits from the trade deficit despite protectionist outbursts, for example.
Iran appears as an exception. Iran has switched to non-dollar currencies for oil export payments, so it can be said that Iran is putting something to the test. Iraq, before the September 11, 2001, attacks, likewise switched to the euro in the midst of already having sanctions -- something that seems to have been forgotten in recent media discussions of the dollar. Subsequently, Iraq was invaded, and the president of Iraq was executed. Oil transactions were re-denominated in dollars. Obviously, there may be a struggle there that the media is not discussing. The First World gives it to the Third World both ways, criticizing it for accumulating dollars and criticizing it over the idea of not accumulating dollars, but the struggle of the First World against imperialism already involves the dollar, and perhaps (leaving aside whether Iraq's wealth increased by abandoning the dollar) some Third World leaders subject to real pressures make economic sacrifices, even if they are against individual or short-term interests. Whether war is an antecedent or a consequence of abandoning the dollar, or of trade disruptions, may not be particularly important as a larger struggle is concerned.
The United $tates gets goods effectively for free partly because other countries need dollars to buy oil and export goods to get those dollars. Most of the those dollars then end up somewhere other than domestic investment and consumption in the oil-exporting countries. This is a dirty secret underneath discussions of the dollar in the context of Iran. Obscuring this is media discussion of reserve currency diversity, currency baskets, and supranational currencies, as being potentially U.$.-friendly by stabilizing the world economy.
Regardless of the relationship between dollar supremacy and unequal exchange, short- and long-term interests of bourgeoisie and exploited in the Third World, and narrow/individual and broad interests, the Third World may need to pass through a stage of confronting trade imbalances (monetary terms) with the First World and First World currency supremacy before confronting price-value distortion unequal exchange -- even if that stage is painful and contradictory. In other words, whether the dollar is important in any direction for a group of Third World people at a particular time, letting go of the dollar may have to precede efforts against unequal exchange. For one, it's a matter of being ideologically prepared to deal with other problems in international economic relations; the dollar supremacy & oil issue is detrimental in the long term and is easier to understand. If such a bourgeois as Saddam Hussein did die over the dollar or threatening the United $tates with an anti-Amerikan cartel, that should give hope. Exploitation is real, and there is pushback against it one way or another. Not everything about the value of the dollar, inflation, capital inflows to the United $tates, etc., has to do with the "psychology" of investors and consumers or the competence of economic authorities.
Notes
1. http://prisoncensorship.info/archive/etext/mt/imp97/index.html